Business schools around the world often study the January 2000 merger of Time Warner & AOL under the headline “Worst Mergers In American Corporate History”. It is not unusual, or unnatural for content creation companies to enter the distribution market, but AOL and magazine publishing arm Time Inc. have dogged their parent companies earnings for years now. Looking to cut its losses, Time Warner announced on Wednesday that it was close to spinning off America Online, an acquisition that has cost the company more than $100 billion in shareholder value.
According to the filing; “Although the company’s board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions.” When asked about the future of Time Warner, CEO Jeffery L. Bewkes claims the future “may well include publishing” but made it clear that this could change at any time. The company is likely holding out on making any decisions about Time Inc. until the recession eases and it can see if weakening print sales are a result of the recession, or the shift of its readers to online mediums.
Time Warner has already spun off it's cable division, and is clearly looking to focus on content creation, rather than delivery. I also can't help but wonder whether or not an independent AOL would become an acquisition target for Microsoft. The ad network was one of the primary drivers behind the Yahoo talks, and this is one area that AOL still does reasonably well in.
Can AOL survive on it's own? Hit the jump and let us know what you think.
Time will tell if this proves to be a somber moment or cause for celebration, but AMD on Wednesday announced that it had secured stockholder approval for the creation of 'The Foundry Company.' That means AMD can now officially focus its efforts on the design of new chips and technologies, leaving the burden of manufacturing and associated costs to its Abu Dhabi-based spinoff.
While the split into separate design and manufacturing firms represents a major shift for the No. 2 CPU maker, the original vote had to be postponed after a low turnout by shareholders last week. At the time, 97 percent of the shares voted were cast in favor of the spinoff, but the shares voted represented only 42 percent of its total stock. This time around, AMD managed to scrounge up the majority vote it needed.
Under terms of the deal, AMD stockholders approved a proposal to issue 58 million shares of the company's common stock with warrants to purchase 35 million shares of its common stock and 35 million shares of the common stock upon exercise of those warrants to an affiliate of the Mubadala Development Company PJSC.
The transaction is expected to close by March 2, 2009.